SEC Proposes Significant Changes to the Registered Offering Framework

Highlights

• SEC proposes significant amendments to modernize and streamline the registered offering framework under the Securities Act.
• The proposed amendments would significantly expand access to Form S-3, shelf registration and ATM offerings by eliminating existing public float and “baby shelf” limitations and removing the current requirement that issuers wait 12 months before becoming eligible to use Form S-3.
• The proposed amendments would extend many WKSI-style communications and offering accommodations to a substantially broader range of domestic public companies through new “ELI” and “SELI” categories.
• The proposed amendments would modernize Form S-1 incorporation-by-reference rules and preempt state blue sky registration and qualification requirements for registered offerings.

On May 19, 2026, the U.S. Securities and Exchange Commission (SEC) proposed amendments to the registration framework under the Securities Act of 1933 (the Securities Act) intended to modernize and streamline the registered offering process (the Proposing Release).¹ The proposal would significantly expand access to Form S-3 and shelf registration by eliminating existing public float, seasoning and “baby shelf” limitations, extend certain benefits currently reserved for well-known seasoned issuers (WKSIs) to a broader range of public companies, modernize incorporation by reference on Form S-1, and preempt state securities law registration and qualification requirements for registered offerings. The proposal also includes a range of related conforming and modernization amendments. Comments are due 60 days following publication in the Federal Register.

Background

The current registered offering framework is tiered based on issuer size, Securities Exchange Act of 1934 (the Exchange Act) reporting history, and market following. Since the adoption of Form S-3 and the integrated disclosure system in the early 1980s, the SEC has conditioned access to short-form and shelf registration on the premise that certain public companies are sufficiently well-followed by the market so that investors can rely on a company’s reports filed pursuant to the Exchange Act , rather than extensive offering-specific disclosure. In the Proposing Release, the SEC explains that these standards historically were intended to ensure that information about eligible companies was broadly disseminated and actively followed by investors, analysts, and other market participants.

Under the current framework, Form S-3 eligibility generally requires at least 12 months of Exchange Act reporting history and, for unlimited primary offerings, a public float of at least $75 million. Automatic shelf registration, which permits certain registration statements to become effective immediately without prior SEC staff review and allows companies to register unspecified amounts of securities for future offerings, is currently limited to companies that qualify as WKSIs. WKSI status generally requires either a public float of at least $700 million or at least $1 billion aggregate principal amount of registered non-convertible securities issued in the prior three years. Companies that do not satisfy those requirements generally must use Form S-1, which does not permit delayed or shelf offerings and requires more extensive updating through post-effective amendments and prospectus supplements.²

In the Proposing Release, the SEC indicated that the proposed amendments represent a recalibration of these longstanding eligibility requirements to reflect modern capital markets and the current availability of public company disclosure through EDGAR and other electronic channels. The SEC noted that many of the existing eligibility requirements for short-form registration and related offering accommodations were developed when SEC filings were available primarily in paper form and the concept of “market following” served as a proxy for the dissemination of company information. According to the Proposing Release, widespread electronic access to Exchange Act reports and other issuer disclosures has substantially changed how investors obtain and evaluate information, reducing the need to condition access to Form S-3 and related offering benefits on public float, seasoning, or other measures of market following.

The Proposed Amendments

Revised Form S-3 Eligibility Requirements

The proposal would substantially revise the eligibility requirements under proposed General Instruction I.A of Form S-3 by eliminating several eligibility conditions, while retaining the requirement for current and timely Exchange Act reporting compliance as the principal eligibility standard.

Elimination of 12-Month Seasoning Period. Most significantly, the proposal would eliminate the current requirement under General Instruction I.A.3(b) that a company must be subject to the Exchange Act reporting requirements for at least 12 calendar months before becoming eligible to use Form S-3. In the Proposing Release, the SEC notes that this seasoning requirement no longer reflects how investors access and evaluate disclosure in modern markets, given the widespread electronic accessibility of Exchange Act reports through EDGAR and other digital channels.

While the proposed amendments would eliminate the 12-month seasoning requirement, companies would continue to be required to satisfy the current and timely reporting requirements under proposed General Instruction I.A.1. Specifically, a company would need to have timely filed all required Exchange Act reports during the preceding 12 calendar months, or such shorter period that the company was required to file such reports, subject to the existing exceptions for certain Form 8-K items. The proposed amendments also would introduce a limited accommodation for certain late filings under proposed General Instruction I.A.1.c. Under the proposed amendments, a company would remain eligible to use Form S-3 notwithstanding a single untimely filing during the applicable lookback period, provided that the filing was made within seven calendar days of the original due date and was the company’s only late filing during the applicable period.

Eliminating Outdated Technical Eligibility Conditions. The proposed amendment would eliminate several existing Form S-3 conditions applicable to companies that the SEC characterizes as outdated or unnecessary. These include the “Certain Failures to Make Payments and Defaults” condition under existing General Instruction I.A.3(c), as well as the conditions tied to electronic filings and Interactive Data Files under existing General Instructions I.A.3(d) and (e). According to the SEC, those provisions no longer serve a meaningful gatekeeping function in light of current EDGAR filing requirements and the widespread use of XBRL reporting.

Expand Categories of Companies Prohibited from Using the Form. In addition, the proposed amendments would expand the categories of companies prohibited from using Form S-3 under proposed General Instruction I.A.2. These proposed restrictions would apply to certain “ineligible issuers,” including blank check companies, shell companies (other than certain business combination-related shell companies), penny stock issuers, companies subject to specified SEC stop or refusal orders, and companies subject to certain antifraud-related orders, injunctions, or criminal convictions during the preceding three years. The proposal further would prohibit FPIs, asset-backed issuers, registered investment companies, and business development companies from using Form S-3, directing those registrants to their respective dedicated registration forms.

Revise Incorporation by Reference. The proposed amendment would revise the incorporation-by-reference framework in Form S-3 specified in Item 12 of Form S-3, including through the introduction of a new “Form 10 information” concept that would permit certain Form 10 information³ omitted from the registration statement at effectiveness, to instead be incorporated by reference from subsequently filed Exchange Act reports. In addition, the proposal would eliminate the current successor registrant instruction, such that successor registrants generally would no longer be permitted to rely on predecessor Exchange Act reporting history for purposes of establishing Form S-3 eligibility.

Proposed Elimination of Form S-3 Transaction Requirements, Including the “Baby Shelf” Limitations

The proposed amendments would eliminate the Form S-3 transaction requirements specified in General Instruction I.B in their entirety through amendments as part of a broader effort to simplify and expand Form S-3 eligibility. Under the proposed amendments, any company that satisfies the revised Form S-3 company eligibility requirements described above and is not otherwise ineligible to use Form S-3 would be eligible to use the form without also satisfying any separate transaction-level conditions. The proposed amendments would include eliminating the requirement in General Instruction I.B.1 which specifies that a company must maintain at least $75 million in public float to conduct unlimited primary offerings for cash using Form S-3. Under the proposed amendments, any eligible company could use Form S-3 for primary or secondary offerings of its securities.

In the Proposing Release, the SEC states that the existing transaction requirements were developed at a time when public float and market following were viewed as important indicators of the availability and dissemination of information about public companies. According to the SEC, the widespread electronic accessibility of Exchange Act reports through EDGAR has materially changed the information-dissemination landscape such that Form S-3 eligibility should depend principally on the availability and currency of Exchange Act reports rather than on market following as measured by public float. The SEC further states that the existing public float thresholds may unnecessarily restrict access to the registered capital markets for smaller reporting companies and newer public companies, notwithstanding the public availability of their Exchange Act disclosures.

Because General Instructions I.B.2. through I.B.6. principally apply to companies that do not satisfy the existing $75 million public float threshold and subject to the “baby shelf” limitations, the proposal would eliminate those provisions in their entirety, including the one-third public float limitation under General Instruction I.B.6. As a result, if the proposed amendments were adopted, companies that currently rely on the “baby shelf” framework specified in Form S-3 would no longer be subject to the one-third public float cap for primary offerings conducted on Form S-3 during any 12-calendar-month period.

Expanded Registration and Communications Accommodations — A New ELI and SELI Framework

The proposed amendments would replace the existing domestic WKSI framework with two new categories of eligible issuers under proposed Rule 405: Eligible Listed Issuers (ELIs) and Seasoned Eligible Listed Issuers (SELIs). Under the proposed framework, WKSI status would be retained only for FPIs, while domestic issuers would instead qualify for specified registration and communications accommodations based principally on Form S-3 eligibility and exchange listing status. Under the proposed amendments, FPIs would continue to access the shelf registration framework through Form F-3 and would remain eligible to qualify as WKSIs under Rule 405. The SEC is not proposing to extend the new ELI and SELI framework to FPIs. In the Proposing Release, the SEC states that the proposed framework is intended to more closely align access to offering-related benefits with current market structure and the availability of disclosure, rather than with public float thresholds and other existing WKSI eligibility criteria.

ELIs. Under proposed amendments to Rule 405, an ELI would be defined as a company that is eligible to use Form S-3 and has at least one class of common equity securities listed and registered on a national securities exchange. ELIs would become eligible for a number of communications and offering-related accommodations currently available only to WKSIs. These accommodations would include:

• the ability to engage in unrestricted pre-filing communications under Rules 163 and 163A;
• expanded flexibility with respect to post-filing communications and the use of free writing prospectuses under Rules 164 and 433;
• the ability to register additional securities or classes of securities, including securities of majority-owned subsidiaries, through post-effective amendments under Rule 413;
• the ability under Rule 430B(a) to omit specified information from the base prospectus, including information regarding the plan of distribution, whether the offering is a primary or secondary offering, certain descriptions of the securities being registered and the identification of other issuers; and
• the ability to pay registration statement filing fees on a “pay-as-you-go” basis under Rules 456(b) and 457(r).

In addition, the proposed amendments would extend certain communications and registration flexibilities currently available only to WKSIs and certain non-WKSIs to all Form S-3 eligible issuers, regardless of exchange-listing status. Those accommodations would include:

• the ability under Rule 139 for participating broker-dealers to publish issuer-specific research reports without those reports being deemed offers;
• the ability under Rule 430B(b) to omit the identities of selling securityholders and the amounts of securities registered on their behalf in certain resale registration statements; and
• the ability under Rule 433 to use a free writing prospectus without it being accompanied or preceded by a statutory prospectus.

SELIs. Under proposed amendments to Rule 405, a SELI would be an ELI that also has been subject to the Exchange Act reporting requirements for at least 12 calendar months. SELIs would become eligible to utilize automatic shelf registration under proposed amendments to Rule 462, a benefit currently limited to WKSIs. The SEC states that the proposed 12-month reporting requirement for SELIs is intended to preserve a seasoning component for automatic shelf registration eligibility, while also substantially broadening access to the automatic shelf framework. According to the SEC, approximately 74% of Exchange Act reporting issuers would qualify as SELIs under the proposed framework, compared to approximately 36% of issuers that currently qualify as WKSIs.

Proposed Expansion of At-the-Market Offering (ATM) Eligibility and New Trading Market Requirements

ATMs are continuous or delayed equity offerings in which a company sells shares directly into the existing trading market for its securities, typically through a broker-dealer acting as sales agent, at prevailing market prices rather than at a fixed offering price. ATM programs have become one of the most widely used capital-raising tools for public companies, because they permit companies to raise capital opportunistically, incrementally, and with substantially greater flexibility than traditional marketed offerings.

Under Rule 415(a)(4), a company may conduct a primary ATM offering only if it is eligible to register a primary offering on Form S-3, Form F-3, or Form N-2. As a result, ATM eligibility is currently constrained by the Form S-3 transaction eligibility framework, including the $75 million public float requirement under General Instruction I.B.1 and the one-third-of-float limitation applicable to companies relying on the “baby shelf” framework under General Instruction I.B.6.

Because the proposed amendments discussed above would eliminate the Form S-3 transaction requirements in their entirety if adopted, the proposed amendments would substantially expand the population of companies eligible to conduct ATM offerings.

Companies currently subject to the “baby shelf” framework would no longer be subject to the one-third public float limitation, potentially permitting smaller reporting companies and newer public companies to access ATM programs on an uncapped basis. In the Proposing Release, the SEC states that expanded ATM eligibility could provide companies with greater flexibility to raise capital opportunistically over time and in amounts calibrated to market conditions and company liquidity needs.

To address potential investor protection concerns arising from expanded ATM eligibility, the proposed amendments would revise Rule 415(a)(4) to define the term “trading market” and limit ATM offerings to securities that are either (i) listed on a national securities exchange or (ii) traded on a market designated by the SEC as a qualifying trading market.

In the Proposing Release, the SEC notes that ATM offerings historically have been permitted primarily for exchange-listed securities and securities traded on higher-tier OTC markets, including OTCQX and OTCQB, based largely on SEC staff interpretive positions rather than as codified by SEC rules. The proposed amendments would formalize that framework by establishing rule-based standards governing which non-exchange markets qualify as permissible trading markets for ATM offerings.

Under the proposed amendments, the SEC would designate qualifying trading markets based on a non-exclusive set of factors relating to information availability, market quality, and trading liquidity. Those factors would include reporting standards, bid-price requirements, public float, trading volume, and market-maker participation. The Proposing Release indicates that OTCQX and OTCQB likely would qualify as permissible trading markets under the proposed framework.

Form S-1 Modernization — Expanded Incorporation by Reference

Incorporation by reference permits a company to satisfy disclosure obligations in a registration statement by referencing previously filed Exchange Act reports rather than reproducing those disclosures in full. Currently, however, Form S-1 imposes significant limitations on both backward and forward incorporation by reference as compared to Form S-3. In particular, companies generally may not incorporate by reference into Form S-1 unless they previously have filed a Form 10-K for their most recently completed fiscal year, and forward incorporation by reference currently is available only to smaller reporting companies. In the Proposing Release, the SEC states that these limitations create operational burdens for newly public companies and other companies that regularly access the capital markets but are not yet eligible to use Form S-3.

The proposed amendments would modernize Form S-1 by expanding both backward and forward incorporation by reference. With respect to backward incorporation by reference, the proposal would eliminate the existing requirement that a company previously have filed a Form 10-K for its most recently completed fiscal year. Instead, a company would be permitted to incorporate by reference a filing containing “Form 10 information,” thereby permitting recently public companies that have not yet completed a Form 10-K filing cycle to make broader use of Form S-1.

The proposed amendments would expand forward incorporation by reference to all companies permitted to incorporate by reference into Form S-1 rather than limiting that accommodation to smaller reporting companies. As a practical matter, the proposal would permit eligible companies to update Form S-1 registration statements automatically through subsequently filed Exchange Act reports without the need for repeated post-effective amendments. In the Proposing Release, the SEC notes that the proposed amendments would more than double the number of registrants eligible to use forward incorporation by reference on Form S.

Regulation S-X — Expanded Availability of Financial Statement Grace Periods

Rules 3-01 and 8-08 of Regulation S-X establish “age of financial statements” requirements governing how current financial statements must be at the time a registration statement is filed or declared effective. Under the existing framework, certain companies may rely on extended grace periods permitting the use of older financial statements, thereby avoiding the need to prepare additional interim financial statements on an accelerated basis.

Currently, eligibility for those extended grace periods depends in part on income-based conditions tied to a company’s income or loss from continuing operations. Companies that do not satisfy those income thresholds therefore may be required to update their financial statements more frequently in connection with registered offerings, including by preparing additional interim financial statements that otherwise would not yet be required under the Exchange Act reporting framework. In practice, those requirements can increase transaction costs, compress offering timelines, and delay access to the capital markets, particularly for issuers with volatile or negative earnings profiles.

The proposal would eliminate those income-based conditions entirely, thereby expanding the population of registrants eligible to rely on the extended grace periods under Rules 3-01 and 8-08 of Regulation S-X. As a practical matter, the proposal would permit a broader range of companies to rely on older financial statements for longer periods in connection with registered offerings without being required to prepare incremental interim financial statements solely to satisfy Securities Act staleness requirements.

In the Proposing Release, the SEC states that the existing income tests no longer serve as an effective proxy for the availability or reliability of disclosure and may impose unnecessary compliance costs and operational burdens on registrants accessing the registered capital markets. According to the SEC, the proposed amendments are intended to better align the financial statement staleness framework with the broader objective of reducing unnecessary friction in the registered offering process while preserving investor access to current Exchange Act reporting.

State Blue Sky Preemption for Registered Offerings

Section 18 of the Securities Act currently preempts state securities law registration and qualification requirements for certain “covered securities,” including securities listed on a national securities exchange and securities issued by registered investment companies. Registered offerings involving securities that do not qualify as covered securities, however, remain subject to state “blue sky” registration and qualification requirements. As a practical matter, companies conducting registered offerings of unlisted securities may be required to comply with separate registration and qualification regimes in multiple states, including, as applicable, state merit review standards, separate filing requirements, and coordination with multiple state securities regulators.

Proposed amendments to Rule 146 under Section 18(b)(3) of the Securities Act would define any person to whom securities are offered or sold pursuant to a Securities Act registration statement as a “qualified purchaser” for purposes of Section 18(b)(3). As a result, securities sold in any registered offering would constitute “covered securities,” regardless of whether the securities are listed on a national securities exchange.

In the Proposing Release, the SEC states that the proposed amendments are intended to further the objectives underlying the National Securities Markets Improvement Act of 1996 by reducing duplicative state and federal regulation of registered offerings. According to the SEC, modern electronic disclosure practices and the widespread accessibility of Exchange Act reports and registration statements through EDGAR have reduced the practical utility of separate state registration and qualification review for registered offerings.

As a practical matter, the proposal could materially reduce the role of state blue sky review in registered offerings and simplify the offering process for registrants conducting registered offerings of unlisted securities, including non-traded business development companies and similar investment products. The SEC nevertheless states that the proposal would remain consistent with investor protection because registered offerings would continue to be subject to comprehensive federal disclosure requirements, SEC review authority, periodic reporting obligations, and federal securities law liability provisions.

Importantly, the proposed amendments would not eliminate state antifraud authority. States would continue to retain authority to investigate and bring enforcement actions involving fraud, deceit, and unlawful broker-dealer conduct, as well as authority to require notice filings and filing fees.

Rule 473 — Delaying Amendments as the Default

Under Section 8(a) of the Securities Act, a non-automatic registration statement becomes effective automatically 20 days after filing unless the registrant includes a delaying amendment. In practice, companies almost universally include delaying amendments in order to prevent automatic effectiveness before the SEC staff’s review is complete and the company is prepared to proceed with the offering.

Proposed amendments to Rule 473 would make delayed effectiveness the default for all non-automatic registration statements. Rather than requiring companies to affirmatively include a delaying amendment, all non-automatic registration statements would be deemed automatically to include one unless the registrant affirmatively elects immediate effectiveness under Section 8(a).

In the Proposing Release, the SEC states that the proposed amendment is intended principally to codify existing market practice, eliminate the risk of inadvertent omission, and reduce unnecessary procedural formalities in the registration process.

Conclusion

The SEC’s proposed amendments, if adopted, would expand access to Form S-3, automatic shelf registration, ATM programs, and other Securities Act offering accommodations for a substantially broader population of public companies. The Proposing Release reflects the SEC’s view that access to registered offering flexibility should depend principally on current and timely Exchange Act reporting and the widespread electronic accessibility of issuer disclosure rather than on public float, seasoning, or other traditional measures of market following. Although the proposed amendments could significantly reduce transactional friction and expand access to the registered capital markets, the Proposing Release highlights a range of investor protection, market structure, and operational considerations that may affect whether, and to what extent, the proposed framework ultimately is adopted. Public companies, underwriters, and other market participants should evaluate the proposal in light of their specific circumstances and monitor further developments as the SEC considers comments and potential final rules.